Sunday, December 5, 2010

Nordhaus and Shellenberger in WSJ: How to Change the Global Energy Conversation

For two decades, world leaders have been trying--and failing--to hammer out a workable deal on global warming. Now they're meeting once again, this time in Cancun, Mexico, to kick around the same issues one more time--and, inevitably, stumble over all of the same roadblocks.
At the heart of it, these deals all come down to mandating emissions cuts, which means paying a lot more for energy. Some greens deny it, but clean energy still costs vastly more than fossil fuels. Significantly raising energy costs slows economic growth--something no country wants to do.
As a result, every country has an incentive to point the finger at someone else, while trying to game the system: sheltering key industries, understating emissions and overstating reductions.There is a better way. Nations should focus on lowering the cost of clean energy, not raising the cost of fossil energy. The goal? Make clean energy cheap enough to become a viable option for poor as well as rich nations. Until that happens, emissions will continue to rise, and no effort to regulate carbon can succeed.
How do we accomplish that? Stop subsidizing old technology that will never compete with fossil fuels and create incentives for innovation. Along with ramping up support for research, governments should buy cutting-edge clean-energy technologies, prove them--and then give away the intellectual property, so others can improve on it.
Read the whole article here.


ghost said...

some general remark:
Shellenberger and Nordhaus talk about UN, G-20, blah blah. But: The USA are absolutely incapable of acting in climate issues because of their ideological battles in the congress. They have to talk about the situation in their country first.

I mean, you cannot change coal plants to natural gas plants in the US, because mountain top mining in West Virginia is something like a national treasure in the view of the GOP, teabaggers, and wingnuts (but also in the view of West Virginia democrats).

IMHO, Nordhaus and Shellenberg should care about their own country because the USA policy is just idiotic in this question. (well, it seems we (Germans) are catching up in climate idiocy and I love the USA in many other points)

Besides that: in my opinion you just bring one site of their article. IMHO, the much more important part in their article is to do the rational things first. They are totally right to say: many development projects in the third world are independently from climate change but in the same time, these projects help to adapt to and mitigate the climate change. However, I think that is not new and I do not see any reason not do that because of Kyoto or Copenhagen or Cancun or whatever. However, I also see a lot of problems. For example, the current Bundesregierung is cutting a lot of funds in this area at the moment.

To your points: Nordhaus and Shellenberger say: current clean energy will never be cheap enough and say, one must find new cutting edge clean energy technologies. IMHO, they fall in their own trap: they dismiss technologies that can be improved a lot. They is still a lot of potential in solar and wind power energy.

@ReinerGrundmann said...

The choice of words makes discussion sometimes difficult. Take your choice of 'idiocy'. What can one do against idiocy? Allegedly, pills don't help. Will argument help? Then we get more of ideological fights, so there seems no cure available.
What if there are real interests behind such policies (like mountain top coal mining)? Economists call these rational, as they provide cheap energy. So I suggest to call these views not idiotic but rational (in the above sense of the economists).
The you engage supporters of such policies in debates without demonizing them. And you should engage with one of the first paragraphs I reprinted from the Wall Street Journal article:

"At the heart of it, these deals all come down to mandating emissions cuts, which means paying a lot more for energy. Some greens deny it, but clean energy still costs vastly more than fossil fuels. Significantly raising energy costs slows economic growth--something no country wants to do"

No matter if American or German, this is a key issue which needs addressing.

_Flin_ said...

I disagree that "clean energy costs vastly more than fossil fuels".

It bugs me that there is no distinction at all. PV costs more than biofuels, which is more expensive than geothermal plants, which are more expensive than wind energy.

PV costs and returns depend a lot on siting, as does wind.

Then there is the question of external costs for CO2, which changes the "cost" a lot.

Furthermore the experience in the german market does not confirm the statement that more renewables lead to higher prices. At least in this article in the Sueddeutsche Zeitung it is said that prices for electricity went down 20% in the last year in Germany (too bad that German media still doesn't accept that linking to sources is a good thing).

So, just looking at prices per kWh without external costs and focus on PV might confirm the statement.
But renewables aren't PV only, and external costs really are an essential point of the whole AGW discussion. And how do you factor in the risk of long term changes in fossil fuel prices? Do you at all?

For example in the area around munich, the former mayor of Unterhaching told me that as long as the oil price is above 70$/barrel, the city is making a nice profit with their geothermal plant. Because it's a more economical way of heat and power generation than the alternatives.

(And the best thing about renewables: They are small. There is no need for billion dollar projects, with huge overheads, long building times, corruption and overdue deadlines leading to even more costs.)

So overall the statement "green energy is much more expensive than fossil fuels" is a half truth.

Anonymous said...

I most appreciated Ted Nordhaus's and Michael Shellenberger's constructive approach to one crucial issue: intellectual property (IP). Those two co-founders of the Breakthrough Institute mentioned IP more than a dozen times in that WSJ article. (See on IP also HERE)

For example (or the blog: IPCC's 4th Assessment Report – Annotated by Hilary Ostrov and Peter B.) gives another roughly approach; I think they want to show, too, that it is time to change the Global [..] Conversation (It will be interesting to see how their approach can be supported without violating the copyright (cf. f.ex. HERE).).